The long term goal of this research is to delineate the molecular mechanisms that lead to diabetic retinopathy and identify novel strategies to prevent or reverse the vascular damage. The proposed research seeks to identify cellular and molecular sources of dysregulated ROS, define their specific role in damaging the retinal vessels and evaluate potential therapies for blocking/reversing the injury. The investigators have shown that activation of the superoxide generating NADPH oxidase enzyme NOX2 is a key feature of vascular inflammation during diabetes and other diseases characterized by retinal inflammatory injury. Studies using NOX2-knockout mice have demonstrated the specific pathological role of NOX2. They also have shown that the NOX2-induced retinal inflammation involves activation of the urea cycle enzyme arginase and that both bone marrow-derived and retinal cells are involved. Elevated arginase activity causes eNOS uncoupling by reducing the supply of their common substrate L-arginine. Uncoupled eNOS produces superoxide which reacts with available NO to form peroxynitrite. Decreases in NO reduce protein S-nitrosylation whereas peroxynitrite induces protein tyrosine nitration. These post-translational modifications can enhance the activity of NADPH oxidase and mitochondrial oxidases and deactivate key cellular anti-oxidant systems, which can further increase ROS formation. NOS uncoupling has also been associated with diabetes-induced dysfunction of bone marrow-derived endothelial progenitor cells. The global hypothesis is that diabetes-induced hyperglycemia initiates a cycle of oxidative stress by activating NOX2 in bone marrow-derived and retinal cells which activates arginase, causing uncoupling of NOS, further increasing ROS formation and resulting in chronic inflammation and vascular injury. The proposed experiments will test and develop this model by accomplishing the following aims: 1) Determine the role of NOX2-induced arginase expression in causing NOS uncoupling in diabetes-induced inflammatory reactions and dysfunction of BM-derived cells. 2) Test whether arginase amplifies ROS formation in retinal cells by increasing activities of NADPH and mitochondrial oxidases and deactivating key mitochondrial anti-oxidants via NOS uncoupling. 3) Determine and compare the effects of arginase blockade in preventing dysregulated ROS, inflammatory reactions and dysfunction of BM-derived and retinal cells with those of novel agents designed to release NO as well as scavenge superoxide and hydroxyl radicals and decompose peroxynitrite